News Column

Brent crude at 13-month low despite Iraq risk

August 13, 2014

SUZIE NEUWIRTH



THE PRICE of Brent crude sank to a 13-month low yesterday, after the International Energy Agency (IEA) said oversupply in the market had offset "worrisome developments" in Iraq and other major oil producers.


The industry benchmark fell to $102.65 (61.06) during the day, the lowest price since 1 July 2013.


In its closely watched monthly report, the IEA said that while the situation in Libya, Ukraine and Iraq "remains more at risk than ever", the oil market looks better supplied than expected with a glut even reported in the Atlantic basin.


The IEA warned of particular risks from the unrest in Iraq, as Islamic militants moved towards key oil fields. "While the market has taken comfort from steady export flows from the southern fields, the growing toll of Islamist forces on northern production, signs of cracks in Kurdistan defences and the evacuation of expatriate staff from northern and Kurdistan oil facilities are worrisome developments," it said.


The report added that US and EU sanctions on Russia had made little difference to the market. "The consensus in the industry seems to be that neither set of sanctions will have any tangible near--term impact on supplies," it said.


Civil unrest in Libya has intensified, but the market is currently so well supplied that the country is struggling to find buyers for its oil, noted the IEA, adding that increased output may lower its prices in the short term.


THE FORUM: Page 18 .


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Source: City A.M. (UK)


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